By Kim Yoon-mi

Korea's Fair Trade Commission said yesterday it has decided to fine U.S.-based mobile chipmaker Qualcomm Inc. 260 billion won ($208.2 million) for "abusing its monopoly market status." It is the largest fine ever imposed on a single company in the country.

The FTC said that Qualcomm, which owns key patents for the code division multiple access and posesses 99.4 percent share of the local CDMA modem chip market, demanded higher royalties from local mobile manufactures using other companies' products.

The company demanded 5.75 percent royalties from companies that use other chipmakers' modem chips and 5 percent royalties from those who use its own chips.

The antitrust watchdog said the world's largest cell phone chipmaker also offered rebates to Korean mobile phone makers such as Samsung Electronics and LG Electronics on the condition that they purchase a majority of their chips from Qualcomm.

For example, the FTC said, Qualcomm offered 3 percent of the value purchased to a phone maker if the maker buys more than 85 percent of the modem chips from Qualcomm.

In addition, Qualcomm's "unfairly" demanded continued payment of 50 percent of old royalties even after the patent rights expired, putting heavier cost burdens on local manufacturers, the FTC said.

"Due to the Qualcomm's unfair business practices, its rivals such as Korea's Eonex Technologies and Taiwan's VIA weren't able to enter the local CDMA chip market," said Suh Dong-won, vice chief of the FTC in a press briefing in Seoul.

"With the FTC's decision, we expect that local manufacturers will be able to lower the cost burden which could benefit cell phone consumers as well," he said.

According to FTC rules, the watchdog can levy a fine on a company found abusing market monopoly status up to 3 percent of its sales.

This time, the FTC applied a 2.2 percent rate, he said. According to the FTC, Qualcomm's 2007 sales in the Korean market stood at $3.87 billion, or 35 percent of its total global sales

In 2005, the FTC levied a 113 billion won fine on local fixed-line telecom giant KT Corp.

The FTC started investigation on Qualcomm in 2006 when two U.S. companies - Texas Instruments Inc. and Broadcom Corp. - and two small Korean companies - Nextreaming Corp. and Thin Multimedia Inc. - filed complaints.

Qualcomm Korea president Cha Young-koo said the company cannot agree with the FTC's ruling and will take legal steps.

"The size of the fine, in particular, is quite shocking. We will defend our position as much as we can, through all appropriate legal steps available," Cha told reporters in a news conference he called shortly after the FTC's announcement.

Cha claimed that the FTC's ruling serves for foreign competitors of Korean mobile phone manufacturers and hurt Korean firms' price competitiveness because the "discriminative royalties" and "conditional rebates" that FTC claims are actually "royalty discounts" and "incentives" for Korean firms buying Qualcomm products massively.

"Incentives based on chip purchase volume has contributed to enhancing the price competitiveness of Korean handsets. They were widely used marketing method employed under agreements with Korean handset manufacturers," Cha said.

"Companies like Texas Instruments Inc. and Broadcom Corp. are main suppliers for GSM-using mobile phone makers such as Nokia and Ericsson. They are attacking Korean mobile phone makers and Qualcomm to thwart the spread of WCDMA in the global market," he said.

(yoonmi@heraldm.com)

2009.07.24

By Kim Yoon-mi

Independent financial advisers, or IFAs, will have an upper hand over agents representing an insurance company or private bankers, because clients would want to obtain all kinds of information about financial products in the whole market rather than relying on one financial company, the CEO of a general agency said yesterday. A general agency refers to a financial company which makes agreements with insurers and securities firms to allow IFAs to sell their insurance policies and offer financial advice on fund investments in return for commissions.

Kwak Keun-ho, president and CEO of A Plus Asset Advisor, gave up his 25-year-long career with Samsung Life Insurance in the summer of 2007 to jump into the GA business. He started the company with securities business veteran Kim Kyeong-sin, who is co-CEO.

"I could start this business because I was gearing up for the Capital Market Consolidation Law which took effect last February. Our company wants to help clients redesign their household asset portfolios and investment plans from scratch," Kwak said in an interview with The Korea Herald.

"Consumers have rights to compare all kinds of financial products at once, just like they prefer going to a large electronics mall to buy a TV set rather than going to a certain manufacturer's sales outlet."

A Plus Asset's business portfolio is currently concentrated on insurance, with insurance sales taking up 85 percent of sales. The remainder comes from investment advice on securities funds.

Currently, fund sales are available only through contracts between clients and securities firms, not between companies like A Plus Asset and securities firms, because the revision of the insurance law has been delayed due to the financial crisis last year.

Once the related insurance law is revised as promised by the financial authorities, the company's status will be changed into "insurance sales agency" from the current "large-sized corporate branch operator." Then, the company will be able to sell funds just like brokerages under the Capital Market Consolidation Law.

In the long term, Kwak's goal is to reduce the proportion of insurance to 40 to 50 percent, and increase financial advice on funds and other various financial products in the long term.

"In the financially advanced countries like the United Kingdom, GA takes up more than 50 percent in terms of insurance sales, but in Korea, it's about 2 percent. Our rivals are several giant insurers in Korea," he said.

A Plus Asset has sealed partnership agreements with almost all non-life insurers, 11 major life insurers and five securities firms including Samsung Securities.

According to his claim, giant life insurers would try to raise insurance rates for new insurance products in the years to come to cover losses from their cheap insurance policies sold in the past.

"They would hate that companies like us are growing because we would introduce cheaper products to consumers," he said.

A Plus Asset has about 1,500 "Total Financial Advisers," working at 56 branches across the nation. The company requires them to get four types of certificates - certificates for life insurance sale, non-life insurance sale, variable life insurance sale and investment advisory on securities funds.

More than 50 percent of their clients are wealthy people holding assets worth several billion won, Kwak said. To compete with private bankers, his company's TFAs are required to know every detail of their clients' financial status including the number and the type of bank accounts and securities accounts through frequent contacts and financial consultations with clients, he said.

As of the end of last year, the company raised ($78 million) in sales and 3.8 billion won in net profit. Its net profit is about one-tenth of that of a major life insurer in Korea.

Although the current net profit is small, Kwak was confident that he could catch up with giant insurers in the next five years.

"We have an extremely low contract cancellation rate. More than 95 percent of contracts with our 90,000 clients have never been canceled so far," Kwak said.

The company is preparing to invest in new businesses such as re-insurance and asset management and aims to go public in three or four years, he added.

(yoonmi@heraldm.com)

2009.07.22

그런데 점심먹고나서부터 편도선이 붓기 시작하더니 침 삼키기가 너무 힘들어졌다. 치과에 다급히 전화해보니 "왜 약 안드셨어요!" 라 하신다. -_-; "피곤하셨나봐요. 피곤하면 다시 붓기도 해요."

또하나 배웠다. 사랑니를 뺀 후엔 아프지 않더라도 계속 약을 처방된 것을 모두 먹어야 한단다.
이제 모든 사랑니를 다 빼서 이런 교훈은 나에게는 필요없게 되어 버렸지만 사람들에게 알려야겠다.

"사랑니를 뺀 후엔 꼭 약을 끝까지 드세요!"